WASHINGTON, D.C. — Volkswagen’s diesel car scandal settlements in the U.S. will provide $2.7 billion for emissions reduction projects, with school buses being among the eligible vehicles.

The funding is part of Volkswagen’s two settlements — one with the U.S. and the state of California, and one with the U.S. Federal Trade Commission — in which the German automaker has agreed to spend up to $14.7 billion to settle allegations of cheating emissions tests and deceiving customers with its 2.0-liter diesel cars.

Along with compensating owners of those automobiles and offering buybacks and lease terminations, Volkswagen will be required to fund a $2.7 billion mitigation trust that will pay for projects to reduce oxides of nitrogen (NOx). The goal is to compensate for the excess NOx from the Volkswagen diesel autos by cleaning up diesel emissions from other sources, including school buses, transit buses, large trucks, and freight trains.

The mitigation funding could be used to replace or repower older diesel models of those types of vehicles.

The National School Transportation Association (NSTA) applauded the creation of the mitigation trust fund, noting that private school bus contractors under contract with a school district will be among those eligible to apply for 100% of the cost of replacing or repowering older school buses.

"NSTA welcomes this agreement by EPA, CARB [California Air Resources Board], and Volkswagen,” NSTA President Todd Monteferrario said. “Continued funding for the purchase of newer or the repowering of older school buses is a win-win for the communities school bus contractors serve and the children they safely transport every day.”

For more information about the Volkswagen settlements and the mitigation trust fund, go here.